LONDON — As the United Kingdom edges closer to leaving the European Union, fears about Brexit’s negative impact on the British music industry continue to swirl. The current conundrum: whether one of the world’s biggest recorded-music markets will miss out on the hard-fought gains rights holders won under the EU Copyright Directive, which will hold online platforms like YouTube liable for unlicensed content.
In March 2019, when the European Parliament passed the directive — despite fierce lobbying against it from Google and other tech companies — the law was hailed as a landmark victory for creators and rights holders. The directive would essentially end the “safe harbor” immunity of sites like YouTube in Europe — and thus require them to reach “fair remuneration” deals with rights holders. In business terms, that means YouTube would pay higher royalties closer to the amounts paid by Spotify and Apple.
When the EU Copyright Directive was passed, all 28 EU member states were given two years to implement the directive into national law. It was unclear at the time whether the United Kingdom, as a departing member of the EU, would be included in the mandate.
British government minister Chris Skidmore answered the question recently, saying that because the United Kingdom is leaving the EU on Jan. 31 (well in advance of the EU’s two-year deadline), it “will not be required to implement the directive, and the government has no plans to do so.”
Given that the United Kingdom was one of 19 EU countries that supported the Copyright Directive in the final European Council vote, Skidmore’s announcement was a surprising — and unwelcome — development to the creative sector.
Britain’s music business is worth 5.2 billion pounds ($6.8 billion) to the country’s economy, according to umbrella trade group UK Music. It generates annual export revenue of 2.7 billion pounds ($3.5 billion) and employs over 190,000 people in the country. In a global context, the United Kingdom is the third-largest producer of recorded music in the world, after Japan and the United States, according to IFPI. In 2018, the United Kingdom made $1.4 billion in recorded-music sales.
Many fear that failure to implement the copyright directive will damage the British music economy.
“For advocates of Brexit, the U.K.’s departure from the EU was supposed to provide clarity and certainty,” says Music Managers Forum chief executive Annabella Coldrick. “Unfortunately, only days before Jan. 31, the U.K.’s artists, songwriters, musicians and producers now find themselves faced with the reverse.”
“Lack of clarity will stifle the U.K.’s creative sector,” says Andrea Martin, chief executive of collecting society PRS for Music. “If our creator community is not going to benefit from the same level of protection as those in Europe, we urge the government to set out clearly and quickly how it will ensure the U.K. remains an attractive home for creative businesses and their rights.”
Helen Smith, executive chair of European indie labels trade group IMPALA, agrees, calling Skidmore’s announcement a “blow to the U.K. economy” that sends “a very negative message to British creators about how their work is valued [which puts the country at risk of] becoming the copyright dustbin of Europe.”
UK Music’s deputy chief executive Tom Kiehl predicts the only way the British music industry can maintain growth is if it takes advantage of the provisions set out in the copyright directive. Any failure to carry over the bill’s key measures to U.K. law will let YouTube owner Google “off the hook,” Kiehl wrote in a letter to Skidmore that demanded a meeting to reconsider the issue. “It means that creators will continue to get a raw deal.”
The fate of the copyright directive in the United Kingdom is one of many conversations music industry executives are having with British policymakers about strengthening and modernizing the country’s copyright laws for the digital era. Industry sources say the government favors adopting several of the copyright directive’s key measures in U.K. legislation. Among those is making user-uploaded content platforms liable for hosting unlicensed content and the requirement for “fair remuneration” deals with rights holders. However, there is no guarantee that the government will move forward on those measures now that the European Union Withdrawal Act has become law.
“It remains of vital importance to British music and the U.K.’s creative industries that digital platforms pay fairly for the content they use,” says Geoff Taylor, chief executive of labels trade group BPI. Taylor says the organization will continue to work closely with the government to ensure this goal is met.
“Clarity is critical,” adds John Phelan, director general of international music publishing trade association ICMP. He says that since the copyright directive was passed last year, “governments worldwide have informed us they are looking to replicate [its terms], not shy away from it. It would set the U.K. industry backward not to follow a similar path.
“The U.K. can change the vehicle,” says Phelan, “but it’s crucial the destination remains the same. Not doing so would seriously shake the industry’s sustainability.”